Flagstaff Moves To Create Affordable Housing

LAUREN GILGER: In picturesque Flagstaff, Northern Arizona University is a huge economic engine that brings students and parents to the city fall through spring annually. And the cool mountain climate means tourists flock there year round winter through summer. And as a result Downtown Flagstaff is growing. If you've been up there recently there are a slew of new restaurants and new hotels some new apartment buildings going up.

BRODIE: But all this activity is putting a lot of pressure on the housing market there. That means affordable housing is becoming more and more scarce. So the City Council just approved a $25 million affordable housing bond to go on the ballot in November. So what's the situation like on the ground there?

GILGER: Devonna McGlaughlin is executive director of housing solutions of Northern Arizona, a nonprofit agency that helps with a range of housing issues from down payment assistance to offering low and moderate rentals in homes for sale to a transitional housing program for formerly homeless victims of domestic violence. So I asked her is it becoming difficult for residents to find a place to live there?

DEVONNA MCLAUGHLIN: It is becoming more challenging for households in our community to afford housing. We always have a need because the market doesn't always serve lower income households are the most vulnerable populations, but what we've seen over the last couple of years with increasing home sales prices and increasing monthly rental costs is that it's not just low income households who struggle to find a place to live in Flagstaff that's affordable. It’s workforce, it's your moderate income, and it’s more of a broader socioeconomic problem in our community than it has been during the recession for example.

GILGER: Right. Give us the lay of the land there. Like I know there's a large student population in Flagstaff, but what is the housing landscape look like in Flagstaff right now?

MCGLAUGHLIN: It's an interesting dynamic in Flagstaff because we have a lot of external demand for housing but we have a limited supply of housing so that really causes the problem.

GILGER: Are you seeing an influx of, like we are here in Phoenix, apartment complexes multi-family housing units town homes things like that coming in?

MCGLAUGHLIN: So the interesting thing about housing development is that for many years we didn't have much. So during the recession time period development really slowed down especially in multi-family. The first multi-family that kind of came back after the recession has been targeted towards students. So we've had two or three student housing development complexes that have been built and are now occupied in a couple more that are in the planning stages coming online but not as much for just your normal non-students quite honestly. And we know that it's coming. I mean when we look at plans within the city and the development approval process there are homes that are going to be coming on the market but they're not available yet. And so I'm hoping that that increased inventory will help with the supply side of the problem. It's just not helping today.

GILGER: Are people's income levels at least starting to rise to match the demand or to match the price increase?

MCGLAUGHLIN: Yeah. We've got a couple of things going on in our community with respect to incomes due to the statewide minimum wage increase that was voted on and then also Flagstaff voted on an additional Flagstaff minimum wage that's higher than the state. So we're seeing some incomes rise, but when we started doing our inventory of rental prices and availability two or three years ago. We were looking at it because you know HUD does their fair market rents analysis and we knew anecdotally the fair market rent wasn't the fair market rent. It was higher than what HUD said is the fair market rent. So we started calling apartment complexes in town to try and figure it out. And this one that we just finished in the spring we found that the average rent for a two-bedroom apartment was $1,427 a month which is higher than HUD says it is. And the other thing that's interesting is that that's the rents and HUD's fair market rent includes utilities but most rental complexes don't. So you're going to have to add electric and gas on top of that if it's not already being paid for as part of your rental costs. So if you're a single-income household trying to afford a two-bedroom apartment rent you need to make about $75,000 a year to afford that. And that's higher than you know what the workforce is making in a lot of cases.

GILGER: Right. So let's talk about efforts to address this. I know the city of Flagstaff is considering adjusting city codes to allow sleeping in vehicles. Is homelessness a big problem there?

MCGLAUGHLIN: It is as I think it is across the southwest and across the nation. You know we certainly have folks at the lowest end of our economic scale struggling with housing so of course you know homelessness is and always has been an issue. There's a struggle there between you know your market rate rents and being able to afford them even with some initial assistance. So it is a burden for folks trying to identify and then maintain housing. And certainly that impacts folks who are homeless too. Absolutely.

GILGER: So final question for you then. So what would the impact of this $25 million affordable housing bond that will be on the ballot. Do you think it would it would do enough or make a dent?

MCGLAUGHLIN: So it won't do enough. I would argue but it will make a dent, and an important dent. So we struggle in Flagstaff because we're big enough to think we're big but we're not big enough to actually be big. So we don't qualify for funding from like USDA for rural housing and we also don't get our own allocation of home funds for example because we're not big enough. And so some of those resources available in metropolitan Phoenix areas we just simply don't have. And so if we can as a community say we want to invest our tax dollars into creating units of housing available for our workforce then that really makes a difference and that money can leverage private sector investment, limited federal funds, grant funds you name it. So it's not going to get us $25 million worth of housing. It will get us much more than that because it's not going to pay for the full cost of housing is just going to pay to reduce the cost so that it's affordable to the workforce. It's an important first step because we need to have that first step in order to start making a dent in the problem at a larger scale than what the non-profit community can do on its own or what the limited government help has been so far.

GILGER: Devonna McGlaughlin is CEO of housing solutions of northern Arizona. Devonna thank you so much for joining us to talk about this.